Beijing taxis

All hail

Dissent in the capital’s taxi ranks

BEGGARS, it is said, cannot be choosers. Beijing's taxi drivers, however, appear to have achieved that rare combination. Until recently the city's 66,000 cabs competed fiercely for passengers, darting recklessly and stopping suddenly for anyone wanting a ride. Not any longer. Now drivers are picking their passengers carefully.

The reason is simple: the supply of taxis has remained fixed and demand has risen dramatically. But although drivers' costs have risen too, fares have barely budged, so they complain that the job does not pay.

“If I sit in traffic, I waste time, burn fuel and risk an accident. But the meter doesn't move. What sense does that make for me?” asks Zhang Wei, one of hundreds of cabbies who congregate each day between shifts at Caochangdi, a suburban neighbourhood with a cluster of repair shops, car washes and cheap food stalls.

Beijing's base fare of 10 yuan ($1.60) has not changed in a decade. Charges for travelling farther than the minimum fare were adjusted in 2006, from 1.6 to 2 yuan per kilometre. Since 2009 drivers have added a small fuel surcharge for longer rides. But whereas cabbies' revenues have barely changed, average wages in the city have risen sharply, making the Beijing taxi a rare bargain. An analysis by Macquarie, an investment bank, found that a typical passenger has seen taxi costs fall by half since 2003, relative to average incomes.

Greater affordability has allowed many of the capital's new middle class to switch from crowded public transport to taxis. Some car owners are also turning to taxis to avoid the rising costs of fuel and parking for their own vehicles.

The problem could be solved with a wave of the invisible hand of the market: simply raise fares. But the government, ever sensitive about inflation and about annoying the new middle class, has been reluctant to see that happen. Meanwhile, Beijing residents are left wondering whether it is their own hands—at least when held aloft hailing taxis—that have turned invisible. There is constant grumbling among Beijing's white-collar classes about drivers who decline their custom when the weather is bad, the traffic is heavy, or the destination inconvenient.

Petrol prices are set by the government and have risen twice since early February, most recently by 6% on March 20th, to 8.3 yuan per litre ($5 per gallon). The government has accepted that some fare adjustments may be needed but has given no timetable. For the moment, it is offering to give drivers a monthly subsidy of 300 yuan. Mr Zhang says he will gladly take it, but he calculates that petrol increases will cost him three times that amount. Macquarie calculates that it will take a fare increase of 20-30% to sort things out.

The sooner the better. In February disgruntled drivers were mumbling about a possible strike. Cabbies have gone on strike in other Chinese cities and indeed, in 2008, early in his tenure as party chief of Chongqing, Bo Xilai (recently sacked from that post) burnished his populist-socialist credentials by mediating with striking cabbies on live television.

A strike in Beijing would probably not end so well, and the cabbies know this. But some still speak of staging something less dramatic, like a work slowdown. The trick would be getting anyone to notice.